VAT a thorn in buying

[ylop]

If you want to buy a boat to live on in the UK and are a UK resident, don't buy it in Croatia.

Actually no reason not to if the right boat at the right price comes up. But the right price would factor in UKCA compliance, VAT and transport/delivery costs and so it would usually be more sensible to buy a boat that is already here.

So what you're saying is that I can't return to own country even for brief time eg. Attending a funeral etc

you can do whatever you like. If you chose to sail back to the U.K. (which would normally be an odd thing to do to get to a funeral) and did all the paperwork properly it could be really expensive.

 

[AngusMcDoon]

Actually no reason not to if the right boat at the right price comes up. But the right price would factor in UKCA compliance, VAT and transport/delivery costs and so it would usually be more sensible to buy a boat that is already here.
you can do whatever you like.

No reason not to - apart from the reasons you then give not to. Even if the boat is cheap, there are further reasons not to, for example - it's a right kerfuffle. HMRC might not agree on your boat valuation & charge you more VAT than you were expecting (that's in addition to the next nasty shock that you discover that they are charging VAT on your delivery cost). The certification process is a whole risky unknown can of worms that could lead to enormous unexpected costs on an old boat. You think that all your hatches are ok, the inspector says no because there's no certificate of compliance for them, & no new ones fit the holes. What now, skipper? The need for a replacement engine on importing an old boat has been aired here many times. That bargain boat still a bargain while you are paying storage/mooring fees at the port of entry for an impounded boat that you can't move or use?

There are good reasons almost no-one imported old boats from outside the EU before B, & almost no-one will import from the EU now. Even if an old boat was free, it's probably still not worth it if it needs structural modifications & new just about everything... engine, hatches, gas system, fuel tank, holding tank, means of boarding, fire escapes, owner's manual, bilge pumps, and on and on. If the bulkheads & stability are not to requirements then give up. If it's an old boat built before the RCD existed, or even to RCD 1, it's unlikely to meet much or any of this. A boat at import has to comply with today's standards, not those in force at the time it was built.

 

[ashtead]

Is the current owner a uk resident or from elsewhere? Do you have any Irish family history /roots you might wish to rekindle ? I had thought a uk resident who currently owns a boat in eu could bring home an eu located boat without tax burden and hinderance but others no doubt know more but this right doesn’t pass on sale?

 

[AngusMcDoon]

Is the current owner a uk resident or from elsewhere? Do you have any Irish family history /roots you might wish to rekindle ? I had thought a uk resident who currently owns a boat in eu could bring home an eu located boat without tax burden and hinderance but others no doubt know more but this right doesn’t pass on sale?

Returning Goods Relief only applies when there has been no change of ownership, so the existing owner might be able to return it & the sale take place in the UK, but that would be a big ask on the seller.

There are other tax reliefs when someone is immigrating to the UK, but the rules are tight & not applicable to a UK resident buying then importing a boat.

Nationality of the owner is irrelevant to the boat's VAT & certification status - it's residency that counts. Rekindling Irish roots to gain Irish citizenship is for the sake of the person, not the boat, to get round the Schengen 90/180 rule.

 

[SailingDog]

If it's VAT paid in the EU & you keep it in the EU you are fine. As a UK resident you can't bring it to the UK even for a day because UK VAT will become due.

Should Fly295 go ahead with the transaction and sometime in the future visit UK waters for a period let's say a month or two how would anybody know at the Vat office. The reason I ask is that I am interested in having a vessel in Europe but would be interested in bringing it to UK for the season then back to Europe accepting the 90 day restriction, still seeking the benefits to no avail but making the best of a bad job.

 

[lustyd]

UKCA is easy and just a paper exercise for a boat certified to RCD 2013/53/EU

For now. No confirmation things will remain this way.

 

[lustyd]

Should Fly295 go ahead with the transaction and sometime in the future visit UK waters for a period let's say a month or two how would anybody know at the Vat office.

Because the entry procedure to the UK requires you to declare it, and not doing so would be considered tax fraud. Tax fraud is quite a serious offence.

 

[Graham376]

I am interested in having a vessel in Europe but would be interested in bringing it to UK for the season then back to Europe accepting the 90 day restriction, still seeking the benefits to no avail but making the best of a bad job.

In that case, buy a UK VAT paid boat in the UK which you can take to the EU for 18 months at a stretch.

 

[AngusMcDoon]

The reason I ask is that I am interested in having a vessel in Europe but would be interested in bringing it to UK for the season then back to Europe.

Because the Temporary Admission scheme is pretty generous (18 months in the EU, then leave for 1 day to reset it for another 18 months) the best way to do what you want to do is to have a UK VAT paid/certified boat.

 

[ashtead]

Well there seem a number of options;-
1 get the current owner to repatriate if a uk citizen - expensive and would only do so if no local market;
2 import and pay the uk tax;
3dont bring the boat back to uk but keep in france or Ireland etc taking up Irish nationality to escape rules re duration of stay or make Brittany ferries your friend
4 buy a uk taxed boat ?
Why is it worth buying though ? It might be cheap as no local buyers ? I guess market there’s not that buoyant then?

 

[goeasy123]

OP,

A lot of confusing stuff here. Contact NIRU and ask them. They have the power to rule on individual cases and give you a committed and documented answer. See here.... National Import Reliefs Unit

 

[AngusMcDoon]

Well there seem a number of options;-
1 get the current owner to repatriate if a uk citizen - expensive and would only do so if no local market;
2 import and pay the uk tax;
3dont bring the boat back to uk but keep in france or Ireland etc taking up Irish nationality to escape rules re duration of stay or make Brittany ferries your friend
4 buy a uk taxed boat ?
Why is it worth buying though ? It might be cheap as no local buyers ? I guess market there’s not that buoyant then?

It's not the VAT that probably makes it unrealistic. If it's a cheap old boat it's the certification that's the problem. £10k boat, VAT adds £2k. New engine needed? Add another £10k.

 

[Tranona]

OP,

A lot of confusing stuff here. Contact NIRU and ask them. They have the power to rule on individual cases and give you a committed and documented answer. See here.... National Import Reliefs Unit

Better to go here www.gov.uk/guidance/sailing-a-pleasure-craft-that-is-arriving-in-the-uk in the text is the address of the specialist unit in Portsmouth for pleasure craft imports. Reliefs are really now very simple to understand - at least the 2 appropriate here RGR and Returning Residents

 

[Irish Rover]

The thread seems to have gone off on a number of tangents. Seems a simple enough matter to me. OP, a UK resident, buying a yacht in Croatia which he plans to keep mainly outside UK. Yacht most probably was in EU on B day.
Will it be deemed UK VAT paid when he buys it - No.
Can he bring it back yo UK for occasional short visits without paying VAT - No.

 

[SailingDog]

Because the entry procedure to the UK requires you to declare it, and not doing so would be considered tax fraud. Tax fraud is quite a serious offence.

So Vat is applicable in the event of a short stay in the UK, I wouldn't be importing the boat permanently, understandable if I was.

 

[Irish Rover]

So Vat is applicable in the event of a short stay in the UK, I wouldn't be importing the boat permanently, understandable if I was.

Long or short stay, makes no difference. Still on the plus side UK boaters can bring their boats to the EU without paying VAT - theoretically they have to leave for a short period once every 18 months but, in practice, this period can be very significantly extended by lodging the boat papers with the local customs office when the boat is not in use.

 

[lustyd]

So Vat is applicable in the event of a short stay in the UK, I wouldn't be importing the boat permanently, understandable if I was.

You would be importing the boat. As a non-resident you'd be entitled to use temporary import rules to avoid actual import, but residents cannot use this mechanism, hence immediate tax liability.

 

[lustyd]

It's worth noting that these rules are set up on purpose so that you should pay tax where you're resident and therefore pay your share in society while also giving freedom to travel. If you are resident (aka live somewhere) then buy in that location or be prepared to pay tax when you bring the boat "home".

None of us like paying tax, but the system is at least relatively sensible and fair.

 

[Tranona]

It's worth noting that these rules are set up on purpose so that you should pay tax where you're resident and therefore pay your share in society while also giving freedom to travel. If you are resident (aka live somewhere) then buy in that location or be prepared to pay tax when you bring the boat "home".

None of us like paying tax, but the system is at least relatively sensible and fair.

Sums it up nicely. These rules were EU rules so were of little consequence when we were in the EU - unless you were resident outside the EU or bringing a boat in from say the US. even in EU days VAT on means of transport was supposed to be paid in the state where it was put into service to avoid paying the tax in a low VAT state and then moving to a higher one - for example paying in Germany which was 19% and moving the boat to Sweden where it was 25%. ways round this of course, but the hope was that eventually VAT rates would converge.

UK has carried over the rules because we are now an independent VAT regime so the border is now with the EU as well as the rest of the world. Makes virtually no difference for normal trade at a commercial level, but does for private imports as we see with boats and mail order - or going the other way with for example taking your racing car over to Europe for a weekend race where you need a carnet. The doom mongers suggested it would be the end of F1 because over half of the teams are based in the UK - but they seem to cope OK.

 

[tsekul]

A bit of a hijack here sorry, if a boat was in Guernsey at the end of 2020 is that vat paid in the U.K. or did the Channel Islands have different rules ?